Summer is abruptly over, especially if you work at Bank of America.
After a brief interlude in which Warren Buffett invested $5bn and job losses at the bank were forecast to reach a mere 10,000 people, putative job cuts at the bank have tripled.
On Friday, the Charlotte Observer reported that the bank is now considering 25,000-30,000 job cuts, around 10% of its total employees.
Reuters says the first phase of the cuts will involve the consumer and mortgage businesses and staff functions. Then, in the fourth quarter of 2011 and the first quarter of 2012, the scythe will apparently shift to capital markets, wealth management and commercial banking.
However, Bank of America is already in the process of cutting 3,500 jobs this quarter, including in the investment bank, so for anyone working at BAML the cuts are likely to seem part of a continuum.
A BAML-linked phantom share would be no panacea for bonus pain
Separately, the Wall Street Journal reported last week that the Federal Reserve has been pushing Bank of America to consider issuing a set of shares tied to the performance of the Merrill Lynch unit.
Initially, this looks appealing: the global banking and markets business has performed well compared to the rest of the bank and these shares ought to do well. Bank of America's overall share price has fallen around 50% this year, as has the value of deferred bonuses held in stock.
In reality, however, shares tied to profitability of what was once Merrill Lynch may have performed worse still. Profitability was down more than 70% year-on-year at BAML in the second quarter. Between June 2010 and June 2011 Bank of America's share price fell just 27%.